The ISC has partnered with the Australian Distillers Association to offer an annual fellowship. The fellowship offers the successful candidate an all expenses paid trip to Kentucky USA including:

• Tour of ISC Kentucky Cooperage – maker of spirit barrels for many of the great bourbon distillers of the USA
• Tour of Kentucky Bourbon Barrel Cooperage – suppliers of quality used bourbon barrels
• Tour of select ISC Distillery clients
• Spirit barrel Oak 101 and tasting with ISC R&D Director – Andrew Wiehebrink
• Accommodation and meals
• Return airfares

Nominations

Nominations closed end of December 2022. 20 nominations were received and they were of excellent standard. Six were shortlisted and interviewed by the selection panel made up of Patrick Schwerdt from Independent Stave Company, Cam Syme, Vice President and the Chief Executive. Winner to be announced at the 2023 Australian Distillers Annual Conference in Melbourne.

The partnership with the Victorian Government for the $5million per year over the next four years has been progressing successfully.

Industry and Government has agreed to four streams for the funding.

Stream One – Jobs and Skills

Stream Two – Boosting Visitor Economy

Stream Three – Infrastructure

Stream Four – Export market development

The Victorian Government has funded a position of an Industry Development Officer to assist in the Victorian Distillery Door Program. The grant was provided to the Australian Distillers Association to recruit and manage the role. Funding is confirmed for 18 months, but is expected to continue, subject to meeting the grant objectives. Whilst Richard is managed by the Australian Distillers, the strategy and direction comes from Spirits Victoria Association. Victorian members are encouraged to welcome Richard to the role and reach out to him if you have any issues. Richard can be contacted below.

CONTACT RICHARD

At the end of January 2023, we lodged a joint Pre-Budget Submission, with our colleagues from Spirits and Cocktails Australia, for consideration ahead of the 2023-24 Federal Budget.

Our submission calls on the Government to make modest changes to Australia’s spirits tax regime – by reducing the spirits excise rate and freezing CPI indexation – to create the conditions for the sustainable growth of the Australian spirits industry.

The key messages underpinning our submission include:

This latest CPI increase means we are now staring down the barrel of paying $100 tax per litre of alcohol. This means Australian distillers cannot adequately invest to expand our businesses and explore new opportunities, like export or distillery door tourism. This particularly impacts regional communities because two-thirds of distilleries are based in regional areas. It also runs contrary to the government’s ambition to build local manufacturing capability.

In response to the latest CPI increase to spirits excise, a media release was issued to trade media, resulting in the publication of two articles:

We have commenced a comprehensive communications and government relations strategy to enhance our advocacy for the Parliamentary Inquiry and tax asks, in the lead up to the Federal Budget in May. This will include additional media opportunities to publicly make our case for change to support the sustainable growth of our industry.

Parliament has resumed for the 2023 calendar year. The Association has met with both Minister Husic and Assistant Minister Ayres and advised them we are continuing our campaign for a parliamentary Inquiry. We are calling on the new Albanese Government to establish a bi-partisan Parliamentary Inquiry into the Australian Spirits Industry. Much like what happened in the wine industry 40 years ago, we need Government intervention to allow us to position to a high value, premium and export ready industry.

Our recommended terms of reference are:

1) Examine the current and potential contribution of distilled spirits to the Australian economy and employment, including

a) Its impact along the supply chain, incorporating:

b) Agriculture

c) Manufacturing

d) Retail

e) Tourism and Hospitality

f) Transport (Rail and Trucking Logistics)

g) Its impact in rural and regional Australia

h) Export values, volumes and markets

2) Identify key barriers to growth of the industry, and propose solutions to address these barriers, including:

a) Domestic and foreign investment

b) Sufficient and appropriate labour and workforce skills

c) Value adding manufacturing, transport and inventory infrastructure

d) The spirits excise system, including deregulation solutions

e) Conflicting or contradictory State and Territory licensing regimes

f) Discrimination against distilled spirits in regulatory settings

g) Key trade barriers in export markets

h) Innovation, including through the role of global companies

3) Identify the optimal regulatory framework and settings to promote sustainable growth, including:

a) Job creation

b) Environmental sustainability, energy use and efficiency, water, packaging and transport

c) Innovation

d) Technical standards for production

e) Label integrity, including for export markets

f) Geographic indicators, domestic and international

g) Export readiness, including market intelligence and international distribution information

h) The possible establishment of an independent statutory authority to regulate and promote Australian spirits

A highlight of the 2022 Annual conference was the introduction of the Hall of Fame to acknowledge and celebrate the significant contributions of members in advancing the growth of the Australian spirits industry.

Inaugural members were:

Members are requested to nominate any member they believe has made a significant contribution to advancing the growth of the Australian spirits Industry. Your nomination, and reasons for the nomination, should be sent to the email link below, with the subject line “HALL OF FAME” for the Board’s consideration. Closing date for nominations is 12 noon Monday 6th March 2023.

NOMINATE FOR HALL OF FAME

In the lead up to the Annual Conference and to kick start engagement with 2023, a series of member communications have been produced. We produced a hard copy of a “Thank you for being a member”. This was sent to every person who has updated their contact details in the member portal. Members also received a cap to acknowledge their membership. The brochure had several call to actions including: sign up the rest of your team to the members portal; register for the 2023 conference; join us on socials; and, sign up a non member.

A “Join Now” brochure was produced to encourage commercial distillers to join the Association which will be used by the Industry Development officers, our database of non members and any branch or organisation who are able to assist to sign people up to the Association.

ANOTHER CRIPPLING rise in alcohol excise for spirits’ producers this week – to nearly $100 per litre – will put further pressure on Australian spirits manufacturers.

Spirits and Cocktails Australia chief executive Greg Holland described the excise hike of 3.7% as a “cruel blow” for an industry already hit hard by high inflation.

“This latest excise hike means that spirits producers are now staring down the barrel of paying $100 per litre of alcohol. Australia already pays the third highest spirits tax in the world, with the impost worsening every six months due to these automatic CPI increases,” Mr Holland said.

“It is unsustainable.”

“This six-monthly tax hike is felt by spirits producers right across the nation. It is a handbrake on the jobs, investment and innovation needed to help our industry truly compete on the world stage,” he said.

“Australia’s most exciting industry is being held back by one of the world’s most punitive tax systems.”

Mr Holland said the spirits sector delivers $11.6 billion in total value-add to the Australian economy and employs around 5,000 people in manufacturing. Critically, two-thirds of these manufacturing operations are in regional and rural Australia, bringing important economic benefits to these communities.

“But we are still only seeing a fraction of the potential that the Australian spirits industry represents – and that will continue while we are made to suffer this crippling tax system,” he said.

Australian Distillers Association chief executive Paul McLeay said the industry understood the challenges facing the Federal Budget but that the time was right to consider “modest changes” to current spirits excise arrangements to unlock opportunities for investment and growth.

“A simpler, fairer tax system will turbocharge the investment environment for spirits producers, both domestic and global, to create premium drinks for local consumers, as well as grow export markets,” said Mr McLeay.

“It will be a win-win. We can have the world’s best producers of high-quality spirits right here in Australia. All we are asking for is sensible and modest reforms from a Federal Government aiming to build up the capability of domestic manufacturing industries,” he added.

On behalf of our members, we have lodged a joint Pre-Budget Submission, with our colleagues from Spirits and Cocktails Australia, for consideration ahead of the 2023-24 Federal Budget.

Our submission calls on the Government to make modest changes to Australia’s spirits tax regime – by reducing the spirits excise rate and freezing CPI indexation – to create the conditions for the sustainable growth of the Australian spirits industry.

The key messages underpinning our submission include:

This latest CPI increase means we are now staring down the barrel of paying $100 tax per litre of alcohol. This means Australian distillers cannot adequately invest to expand our businesses and explore new opportunities, like export or distillery door tourism. This particularly impacts regional communities because two-thirds of distilleries are based in regional areas. It also runs contrary to the government’s ambition to build local manufacturing capability.

We need you to write to your local MP to seek their support to fix our unsustainable spirits tax. We have attached a draft for you to use, or you can use your own words.

CLICK TO DOWNLOAD DRAFT LETTER

To view the Pre Budget Submission please follow the links below.

PRE-BUDGET SUBMISSION

ATO Notice:

Your alcohol excise duty rates will increase from 1 February 2023.

You must use the:

new rates 

latest excise return 

For quick access to the latest rates, save our rates webpage to your favourites.

We encourage you to lodge your excise return using our Online services for business and refer to our step-by-step guide on how to lodge.

When you lodge your excise return, remember to:

Coming soon to Online services

From mid-2023, there will be new functions in our Online services including the ability to:

If you're not already using Online services for business to lodge your excise return, now is a good time to start.

Find out more

The draft Ruling sets out the Commissioner’s view of the meaning of ‘legally and economically independent’ for the purposes of the ‘excise remission scheme for manufacturers of alcoholic beverages’ (Remission Scheme) and the ‘excise refund scheme for alcohol manufacturers’ (Refund Scheme). The Remission Scheme replaced the Refund Scheme for eligible alcoholic beverages that entered home consumption on or after 1 July 2021.

The Ruling does not consider the other eligibility criteria for the Remission Scheme or the Refund Scheme.

Under the Remission Scheme, an entity is only entitled to a remission for goods entered in a financial year if the entity is legally and economically independent from any other alcohol manufacturer that has already received a remission for goods entered in the same year.

The phrase ‘legally and economically independent’ is not defined in the Excise legislation. The draft goes on to provide factors in determining what tis legal independence and economic independence.

The ruling does not appear to create any new factors or concerns, but simply clarifies existing arrangements.

The recent ATO Consultation paper, notes:

The significant concern for our members is that our competitors may be making a product that looks like an RTD in the consumer eyes but is only taxed at the beer concessional rate and is thus significantly cheaper than our members spirits based product.

The Australian Distillers Association propose making a submission along the lines that it remains anachronistic that two alcoholic beverages with the same alcoholic strength have significantly different tax liabilities based on the fact that one product is brewed and the other is distilled. There is an urgent need for the Federal Government to consider the implications of this tax treatment, both in terms of government revenue and other policy objectives. While we recognise that broader tax reform of alcohol products is beyond the scope of this guidance and is a longer term project, it is our view that, in the meantime, there needs to be clear ATO advice backed by strong enforcement of the existing taxation rules.

Australian Distillers Association would like to see more detail in the draft Guidance to reflect some of our concerns about whether products are correctly categorised for tax treatment.

While we do not know how individual producers of brewed seltzers and fruity beers are defining their products for the purposes of alcohol tax, we remain concerned that there are products on the market retailing at prices which imply they are paying lower (beer) tax rates, while the products themselves do not present as meeting the definition of beer under the Excise Tariff Act.